International market for ECCO

To attain this the company has always carried out research and courageously tried new paths investing in production technology, fundamental competencies of product development and the employees. While other companies have relied on market trends with regard to elegance and fashion, ECCO has always prioritized usability as their highest mode of design. Four decades after it was founded, ECCO had expanded its operations and had its major markets in Germany, the US and Japan which account for close to 90% of the company’s exports. Over the years, the company worked tirelessly to expand and create new markets especially in the regions of Eastern and Central Europe and Asia. The owners of the company kept the financial ownership within the company and never embraced the idea of adopting Initial Public Offering when the company was facing financial difficulties in the early 21st century.

ECCO overview 4 3. Company’s analysis 4 3. History and progress 4 3. Strategy and planning 5 3. Products and technology 6 3. Environmental analysis 15 6. 1 PESTEL analysis 15 6. Industry analysis 15 6. Porter’s five forces 15 6. SWOT analysis 15 6. This analysis requires exploring both the practical and theoretical knowledge acquired at this level of study. A private company such as ECCO is best suited for this evaluation not only because it is challenging but it also sets out and reveals information that is not available in the current market setup. Problem formulation The main objective for this paper is to evaluate the Chinese market and see whether it is suitable for ECCO to venture into it and establish a niche for themselves. This will be done through a comprehensive analysis of all the forces that act on the market such as the culture of the people, competition and other forces that affect the market.

Methodology This paper is divided into 7 major parts. It goes without saying that the company has come a long way since it started its operations in 1963. Prior to founding his own business and setting up a factory in Bredebro, the founder was the head of production in a shoe factory called Nordsko in Copenhagen. As a result of his experience in this industry and his key role in promoting his designs and his company’s products, ECCO soon started exporting shoes to Sweden, Norway and Finland. The 1970’s saw the company increase its production as well as expand its operations. It is during this period that ECCO opened its first production facility out of Denmark and this was set up in Brazil in 1974.

This tanneries were set up to ensure that the production inputs were of high quality and met the company’s standards. This period saw the opening of the company’s flagship store in Oxford Street in London. The 2000’s witnessed the expansion of the product category with the addition of sports shoes in 2001 and golf shoes in 2003. Strategy and planning As an international company, ECCO is at the point of moving towards an ideal scenario with the help of their 2020 strategy. Under this strategy, ECCO wants to become ‘a retail-driven, consumer-centric, omni-channelly premium shoe and leather goods company’. First, the company aims to make conceptual sales through concept and brand solutions. Also, the company aims to invest over two-thirds of its future investment funds in consumer-facing activities in order increase consumer awareness of their products.

Products and technology Based on their principle symbol of quality, style and comfort, ECCO manufactures its products from high quality leather. The company produces different kinds of products including those of kids, men, ladies, outdoor and casual shoes. The company also has a line of shoes that is specialized for sports and golf lovers. Fig 4: ECCO’s sports collection. Technologically, ECCO has over the years used the direct injection technology which has given the company a competitive advantage since their competitors use different technology. Majority of the products from this company are constructed with an outsole or a midsole that is made from a compound known as Polyurethane (PU). This is a soft and flexible material that is able to react like trampoline while one is walking.

One the upper part of the shoe is done then the PU material is injected directly to the sole of the shoe without stitching or applying any glue thus the name direct injection. Owning tanners has also seen the company minimize its lead time in the general production process. The company has its leather production office in Netherlands. There are other tanners in Indonesia and Thailand. The full-scale production of leather is done in this two countries. Manufacturing ECCO is a company that is not only active but it is one of the top footwear manufacturing companies in the world and thus to has to keep up with competition through innovation and as they do this they must take into cost of production into consideration.

The company outsources shoes that have thin soles because the direct injection technology was not fully utilized. Research and development The company does all the research, product design and development at the headquarters in Bredebro. But with the increase and integration of the company’s operations and communication, the company has devolved a number of development and research activities to manufacturing facilities to enhance on-site practical aspects of the process. Training ECCO has set up three in-house academies that offer exclusive training in leather tanning, shoe making and retail activities. This is aimed at training specialists who will promote quality and lifelong learning. They can also be subdivided into economical forties and affluent forties. These are the pioneers of the era of reforms which makes them to alternate between the new and traditional trends.

Just like the frugal retired, the frugal forties work in either foreign entities, private organizations or parastatals and they earn a modest income. The wealthy forties, on the other hand, earn higher wages and they are more likely to pay for premium quality products this is because they have fewer responsibilities in terms of childcare and will spend money on entertainment and quality healthcare. The thirties This group of consumers is well educated and it is more exposed to the modern environment. The members of this groups majorly reside in cities such as Shanghai, Beijing and Guangdong. This is the group that is least price sensitive and the one that is more willing to spend money on any quality premium products.

This group has a preference for imported products. Culture 5. Negotiations Negotiation is the process of managing relationships. ECCO’s activity in China 6. Internationalization decision making ECCO Company makes decision to venture into foreign markets for two major reason; first is to tap into opportunities presented by foreign markets and the other is to attain growth and profit goals. Market opportunities always give a good reason to any company that has the capability to secure enough resources to venture into this market. For ECCO, China is a good market opportunity not only because of its demographics and economy but also because it presents another important aspect to the company and that is cheap labor. The company also desires to attain maximum profit and growth as well.